Rep. Scott Peters and other members of the centrist Problem Solvers Caucus in Congress unveiled a bipartisan plan Wednesday to avoid defaulting on the national debt this summer.
Their plan calls for suspending the debt ceiling through Dec. 31 to allow time to complete the normal Congressional budgeting process while creating a special commission to review and recommend steps to stabilize long-term deficits and debt.
The Treasury Department expects the country to reach the current debt limit in the early summer, after which the government would be unable to pay all of its bills, resulting in a historic default that could cause the stock market to crash and a depression to begin.
“Failure to lift the debt ceiling would be a catastrophic abdication of our responsibilities as lawmakers,” said Peters. “I would vote to raise the debt ceiling today, without conditions. If that is not an option, we need to find the political courage to come up with an agreement soon that can pass both chambers.”
Separately House Speaker Kevin McCarthy on Wednesday offered to raise the debt limit by $1.5 trillion in return for capping 2023 spending at 2022 levels and limiting growth in spending to 1% annually.
Raising the debt limit doesn’t increase spending but allows the government to borrow to pay for existing commitments made by Congress. The Republican Party has frequently used the threat of default as a bargaining chip in negotiations.
A lengthy 2011 standoff over the debt ceiling led to a first-ever downgrade of the federal government’s credit rating, which rattled markets and raised borrowing costs.
“We can’t sit back and hope this problem solves itself,” said Peters. “This bipartisan proposal, which has the support of more than 75% of Problem Solvers Caucus members, is a responsible way to get there. If others have ideas that will garner enough votes to pass both chambers, we welcome that.”
The caucus, which is committed to finding common ground on key issues facing the nation, was founded in 2017 an has 28 Democrats and 28 Republicans.
